Heads Up, Car Owners: Congress Is Looking Into Raising Road-User's Tax by 300%
The Department of Finance is pushing for a new law on taxes.
(SPOT.ph) We all know being a commuter in Metro Manila is far from being easy, which is why most people save up for years to be able to buy their own car—a solution that has its own set of problems, but that's another story. A new law being might soon be adding to the financial pains: the Department of Finance has drafted a measure that could raise the road-user's tax, a.k.a. motor vehicle user’s charge, by as much as 300%.
However, Congress is proposing to take motorcycles out of the picture, you know, presumably because owners of four-wheeled vehicles are more likely to be able to afford the tax hike.
"I will propose that we exempt motorcycle owners. There are seven million of them," said Albay Representative Joey Salceda in a report by the Philippine Star. Salceda is the chair of the Senate ways and means committee. According to the solon, there are around four million owners of four-wheeled vehicles who will be affected by the hike.
Under the newly proposed measure by the Department of Finance (DOF), the tax will be computed based on the vehicle's gross weight plus its maximum cargo and/or passenger load. That weight, which will be computed by the Land Transportation Office (LTO), will be multiplied according to DOF's rates: P1.40 for 2020, P1.95 for 2021, and P2.50 for 2022. The report cites a 2014 Toyota Hilux 3.0 pick-up with a gross weight of 2,755 kilos as an example. From a fee of P2,040 in 2018, it could rise to as much as P6,887.50 in 2022, says the report.
Currently, vehicle owners pay for their road-user's tax annually at the Land Transportation Office upon renewal of registration. The fees depend on the car type and model, with older units usually costing less. The DOF also suggests fixed rates across all kinds of vehicles.